The Art of Funding a Business |
Posted: November 16, 2011 |
Starting a business requires money, and trying to find that funding is one of the biggest challenges for businesses today. The big question is "Where can you get the money?" A business owner can obtain a flow of income by lining up two or more sources, before starting their business. They can also enlist the help of former employees to provide a source of start-up work and funding. For larger companies, sending in their work overflow may help to save them money. Passing along smaller jobs they don’t want to do may increase funding into their business as well. Another source of funding is for business owners to take on a part-time job. They can invest the extra-earned money into their business. Living frugally can help a business. Make your coffee at home, instead of getting Starbucks. Bring your lunch to work and cook dinner at home, rather than dining-out or having food delivered. You’d be surprised on how cutting down on simple luxury expenses such as these, can actually save quite a bit of money. It’s extra funding that can be put into your business. The use of credit cards can help fund your business. If a business owner has good credit, all extra necessary expenses can be purchased with a credit card. If the credit card offers an available line of credit, an instant loan can be accessed. This, however, depends on the credit limit. Credit can be received through the bank as well. This is called a home equity line of credit. The bank allows business owners to borrow up to 75% of the appraised value on their home. Depending on this value, as well as what is owed on other mortgages, this use of credit can put a significant chunk of money toward your business start-up. Applying for loans can help developing business owners. Business loans, and loans through peer lending sites, such as Prosper.com and Lendingclub.com, can become great avenues for generating funds. One of the most popular methods of acquiring funding is looking for angel capital. However, business owners must have a business plan, as well as provide proof of experience for running a business, before looking for this kind of capital. Also, the business owner must explain how his or her business will generate enough money so that their investors are making a nice profit. Gaining funding for a business may feel like an unmovable mountain to business owners. However, through innovation, frugal spending, correct usage of a credit cards, and applying for loans, businesses can finally see their hard work prosper into something greater: a business.
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